Buying Gold ETF: The Practical Guide to Gold ETCs for German Investors

A gold ETF tracks the performance of the gold price by holding physical precious metal in a fund and issuing shares. In Germany, pure gold ETFs are not tradeable due to the UCITS diversification rule.

Investors instead turn to gold ETCs, or Exchange Traded Commodities with physical backing. These are considered the safest way to invest in the precious metal.

What a Gold ETF is and how it works

A gold ETF (Exchange Traded Fund) is a stock exchange-traded fund that tracks the gold price. The fund acquires the metal, stores it on behalf of investors, and issues shares in return.

Each share represents a fraction of an ounce. When the gold price rises, the value of the share rises in the same proportion.

Why there are no pure gold ETFs in Germany

European UCITS regulation mandates diversification across multiple components. An index fund with only one commodity is therefore not permitted.

This is why German investors do not have access to classic gold ETFs, but rather stock exchange-traded commodity papers. In Switzerland, by contrast, true gold ETFs are permitted.

The difference between ETF and ETC

The most important difference lies in the legal structure. A stock exchange-traded index fund is segregated assets and is protected in the event of the provider's insolvency.

An ETC is an indefinite bearer debt security and therefore not segregated assets. However, the investor bears an issuer risk, which is cushioned by deposited precious metal.

Gold ETCs as standard for the German market

Exchange Traded Commodities are the typical form for investing in the yellow metal here. Currently, around 24 of these papers are available on German stock exchanges.

Most are physically backed. This means: behind each share stands genuine metal stored in a vault.

Physical backing and custody

Physically backed products hold gold bars as collateral. The custody is maintained in high-security vaults, often in Frankfurt or London.

The backing is verifiable daily and distinguishes these papers from synthetic, swap-based variants without genuine precious metal.

Physical gold ETF with delivery claim

A pure physical gold ETF does not exist in Germany, but there are commodity papers with delivery options. With these, investors can request delivery of the deposited metal from a minimum amount.

Delivery usually occurs as bars or coins, depending on the provider and its terms.

Tax advantages through physical backing

The central appeal of physically backed products lies in taxation. Papers with genuine delivery claims are taxed like physical precious metal.

Investors who hold shares for longer than one year can realize capital gains tax-free. This very treatment of capital gains is what makes such products interesting for long-term investors.

The Federal Tax Court ruling

The Federal Tax Court confirmed in its ruling of 16.06.2020 that physically backed papers with a delivery option are treated like a direct gold purchase. This means that after one year of holding, tax exemption applies.

This Federal Tax Court rule does not apply to products without a delivery claim; here capital gains tax is levied. This legal source is decisive for tax classification.

Which ETCs are tax-privileged

Products with delivery and tax advantages include Xetra-Gold, EUWAX Gold II, EUWAX Gold Core, WisdomTree Core Physical Gold, and Gold Bullion Securities, among others.

Before purchase, it is worth reviewing the respective product data sheet as a reliable source, as the delivery claim determines whether capital gains tax applies.

Costs and fees in focus

Ongoing fees noticeably impact returns over years. The Total Expense Ratio, or TER, covers insurance, storage, and management.

For stock exchange-traded gold papers, it ranges from 0.00% to 0.99% per year.

Total expense ratio and product costs

• Cheapest products (0.00% p.a.): EUWAX Gold, EUWAX Gold II, Xetra-Gold, boerse.de Gold ETC
• Most expensive paper: BNPP Gold ETC at 0.99% p.a., swap-based
• Typical range of product costs: 0.00% to around 0.40% for physical variants

A low total expense ratio is a genuine lever over the holding period. Even small differences add up through the compound effect to significant amounts.

Spread and liquidity on the exchange

In addition to the TER, the spread matters—the difference between bid and ask prices. Liquid papers with high trading volume have tight spreads.

Pay attention to fund volume: large products typically trade more cheaply and more stably.

Major providers overview

The market is dominated by a few large providers with high fund volumes. Size here means liquidity, tight spreads, and stable custody.

The following products lead the rankings by assets under management.

iShares Physical Gold ETC and other heavyweights

• iShares Physical Gold ETC: approximately 29,421 million EUR in fund volume
• Invesco Physical Gold ETC: approximately 23,564 million EUR
• Xetra-Gold: approximately 20,186 million EUR

The iShares Physical Gold ETC is the largest-volume product of its kind in Europe. The Invesco Physical Gold ETC follows close behind.

Both are physically backed and easy to trade. Those who place a clear emphasis on liquidity will find a solid selection here.

XETRA Gold as a German classic

Xetra-Gold is particularly well-known here. The product represents a claim on one gram of precious metal per share and offers physical delivery.

XETRA Gold is traded on the Frankfurt Stock Exchange and is among the cheapest options with 0.00% management fee.

Trading via the Stuttgart Stock Exchange

Many of these commodity papers can be traded via the Stuttgart Stock Exchange. The EUWAX products, for example, originate from this environment and offer a delivery claim on the metal.

Trading via the Stuttgart Stock Exchange is transparent and easily accessible for private investors.

Performance and returns of a gold ETF

Gold is considered a safe haven and protection against inflation. Especially in periods of high inflation, investors increasingly seek real assets.

Recent performance has been strong: in 2025, gold prices set records 53 times and delivered the best performance since 1979.

Current performance figures

• Best 1-year return: EUWAX Gold II at +35.46%, EUWAX Gold at +35.44%
• 3-year returns: approximately +110% to +114%
• Performance 2026 (as of 31.05.): +4.27%
• Spot price early 2026: approximately 4,059 USD per ounce

This strong gold price development attracted investors worldwide. In 2025, approximately 89 billion US dollars flowed globally into physically backed gold ETFs, a record amount.

The deposited gold holdings of major European providers alone now comprise several hundred tonnes of gold bars in vaults. Such gains over three years are historically more the exception than the rule.

Realistic expectations for returns

Over long periods, the precious metal has delivered lower returns than broadly diversified stocks. It pays no dividends and no interest.

Its purpose is diversification and reduction of volatility, not maximum wealth growth. As an investment for protection, it reliably serves this purpose.

Building gold ETCs via savings plan

Many online brokers offer ETF savings plans for gold papers. With such ETF savings plans, a gold allocation can be built up gradually and without requiring a large lump sum.

Which ETF savings plans are available is determined by the respective bank.

How ETF savings plans work

With an ETF savings plan, you buy shares at fixed intervals for a fixed amount. These ETF savings plans smooth out the entry point and benefit from the average cost effect.

Even small amounts are possible, often starting from 25 euros per execution.

Savings plan or lump-sum purchase

A savings plan is suitable for gradual building over years. The lump-sum purchase works when a larger amount is available.

Both options can be combined. Many investors start with ETF savings plans and selectively add to positions during pullbacks.

Gold ETF Comparison: What matters when purchasing

A thorough gold ETF comparison begins with four factors: costs, liquidity, backing, and delivery. Those who check these factors will reliably find the right paper for their portfolio.

The four selection criteria

1. Total expense ratio: as low as possible, ideally under 0.30% p.a.
2. Liquidity and spread: high fund volume, tight trading margins
3. Physical backing: genuine metal in vault rather than swap structure
4. Delivery claim: enables tax-free treatment after one year

Table as decision aid

A compact table helps in direct comparison. Enter the TER, fund volume, backing, and delivery claim for each candidate.

The table then shows at a glance which paper is the best gold ETF in the respective segment for you.

Finding the best gold ETF

The best gold ETF depends on your goal. Those wanting to use tax advantages choose a physically backed product with delivery.

Those watching costs choose a paper with 0.00% management fee. A well-thought-out investment combines both.

Gold ETCs versus gold mining stocks

In addition to the commodity papers discussed, there are gold mining stocks as an investment. Gold mining stocks are shares in mining companies and often react more strongly to the gold price than the metal itself.

They carry additional company and equity risks.

Opportunities and risks in comparison

Gold mining stocks can outperform significantly during upswings. However, they fluctuate more heavily and depend on extraction costs, management, and leverage.

Those seeking pure protection and direct gold exposure are usually better served by physical commodity papers.

Understanding risks and currency risk

Even a seemingly safe investment in the yellow metal carries risks. The gold price fluctuates, and longer stagnation phases are possible.

With these papers, issuer risk is added, which the physical backing significantly limits.

Currency risk in US dollar products

The metal is traded in US dollars. This creates a currency risk if the euro appreciates against the dollar.

There are currency-hedged euro variants with daily hedging that reduce this risk, but at the cost of additional fees.

How much gold belongs in a portfolio

A proven rule limits the gold allocation to at most 10% of wealth. Our guide recommends strategic allocation: the precious metal supplements stocks and bonds but does not replace them.

This keeps the portfolio balanced and diversification effective.

Buying gold ETC: Step by step

Those wishing to purchase such a commodity paper need a securities account with a bank or broker. The process is straightforward and identical to trading other securities.

From account to order

1. Open an account: with a broker that provides access to gold ETFs and commodity papers
2. Select product: filter by gold ETF comparison for costs and backing
3. Place order: as a lump-sum investment or via an ETF savings plan
4. Check holdings: regularly monitor performance and spread

These four steps make the investment plannable. Pay attention to exchange trading hours, as tight spreads occur especially during peak trading hours.

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Frequently asked questions about gold ETFs

Are gold ETFs permitted in Germany?

Pure gold ETFs are not tradeable due to the UCITS rule. Instead, investors use stock exchange-traded commodity papers that serve the same economic purpose.

Which ETC offers delivery?

Products like Xetra-Gold or EUWAX Gold II enable physical delivery. Delivery is the requirement for tax-free treatment of gains after one year.

Is a gold savings plan worthwhile?

ETF savings plans are suitable for long-term, disciplined building. They smooth out entry and work well as an addition alongside stocks and funds in a portfolio.